Kiss and make up - and risk a welfare cut

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Tens of thousands of sole parents on parenting payments may be
financially worse off under the Federal Government's
welfare-to-work changes, despite initial assurances that existing
recipients would be protected.

An analysis by the National Welfare Rights Network shows that
not only will about 90,000 new applicants be worse off when the new
rules take effect next July, but an extra 50,000 sole parents now
on the parenting payment (single) will lose between $22 and $68 a
week.

Recipients with school-aged children who move off the payment
after next July to live with partners, reconcile with partners or
to get well-paid full-time jobs appear to have no way back onto the
payment if the new relationships or jobs do not work out. Instead,
like new entrants, they will have to apply for the "enhanced"
Newstart allowance, which pays $20 a week less. As well, they will
lose 60 cents of that allowance for every dollar they earn,
compared with only 40 cents if they had stayed on the payment -
making part-time work less worthwhile.

The president of the network, Michael Raper, said the changes
would be a disincentive to existing recipients to risk extra work,
reconciliation or repartnering. "Imposing activity requirements
… is one thing, but there are no grounds for such harsh
payment cuts," he said.

A study by Bob Gregory, a professor of economics at the
Australian National University, showed "churning" (moving on and
off payments) was common among sole parents, with 60 per cent
moving off welfare but returning within five years.

Mr Raper cited the case of "Rebecca", a sole parent with two
school-aged boys. She earned $200 a week and received some
parenting payment to lift her income to $390. If she reconciled
with her husband after next July, her payments would cease due to
their combined earnings.

If the reconciliation failed, she would be put on Newstart and
her income would fall to $327, a drop of $63 a week, "because she
gave her marriage another go".